Tax Cut Myth Busting, Round 2

J.D. Foster / August 03, 2010

Bill Gale’s discussion of the five myths about the Bush tax cuts was an unusually slanted piece from a normally straight-shooting liberal economist. With respect to an old friend, a little further myth busting is called for.

Tax Relief as Stimulus
Gale refers to the proposition that extending the tax relief “would be a good way to stimulate the economy” as a myth. In doing so, he conveniently erects a bit of a straw man. Continuing current policy cannot add much to stimulus except by erasing a debilitating source of uncertainty regarding tax policy. The real issue is how much damage a tax hike would inflict on a weak economy. (more…)